Sea World, other Anheuser-Busch parks for sale?

JENNIFER HILLER, San Antonio Express-News |
July 15, 2008

Monday's announcement of the sale of St. Louis-based Anheuser-Busch to Belgian brewing giant InBev throws the future of 10 Anheuser-Busch entertainment parks into the air, including SeaWorld.

Because the parks as well as the packaging company owned by Anheuser-Busch are considered non-core assets, InBev likely will sell them to pay some of the $52 billion cost of taking over the brewer of the King of Beers.

"I know InBev wants to focus on the core, and the theme parks are just not part of that," said Jack Russo, an analyst with Edward Jones.

Selling the parks and the packaging company could raise $5 billion to $6 billion for InBev. The parks themselves are worth an estimated $3 billion to $4 billion, Russo said.

But finding an immediate buyer could prove difficult.

"I think they want it to take place very quickly, but I don't know how many buyers there's going to be right now," Russo said. "It's more of a buyer's market than a seller's market."

Hayley Wolff, an analyst with Rochdale Research in Stamford, Conn., said the eventual buyer might come out of Dubai or be a private equity group. The Blackstone Group purchased Europe's Merlin Entertainments and Legoland parks in 2005.

But it's hard to find a publicly traded U.S. theme park company that's both financially healthy and a good fit for the parks.

"On the strategic buyer side, it's difficult to find a company that has the resources to consider a purchase," Wolff said.

"The regional theme parks Cedar Fair and Six Flags are not in the acquisition mode given their debt load and the economic conditions."

Dennis Spiegel, president of the consulting company International Theme Park Services, Inc. in Cincinnati, Ohio, said it's been a flat year for parks thanks to the economy and high gas prices, but called the likely sale of the Busch parks a once in a lifetime opportunity for someone to buy a finely honed company.

"It's a well-run company. It's a very, very stellar park system, and that is hard to find," Spiegel said. "They're in as good of shape as Disney."

Spiegel predicted the buyer would be a European firm taking advantage of the weak dollar or a U.S. private equity group. Disney typically develops its own parks and is not interested in regional parks, while Universal Studios has not been in acquisition mode for 15 years, he said.

But Spiegel called the sale of the 10 parks inevitable, even if Anheuser-Busch had tried to fight off a hostile takeover by InBev.

"We think the parks would have been put into play because Anheuser-Busch would have needed to sell to fight the proxy," he said.

SeaWorld San Antonio officials declined to comment, as did Anheuser-Busch officials in St. Louis. They referred calls to InBev.

"While it's too early in this process for InBev to have made decisions about all aspects of Anheuser-Busch's operations, such as the entertainment business, we are very mindful of their important role in those communities and will seek to help preserve that role," said Marianne Amssoms, vice president of global external communications for InBevin an e-mail message.

Busch Entertainment Corp., a subsidiary of Anheuser-Busch, has owned SeaWorld since December 1989.

Other Busch parks are SeaWorld in Orlando, Fla., and San Diego, Busch Gardens Africa in Tampa, Fla., Busch Gardens Europe in Williamsburg, Va., Discovery Cove in Orlando and Sesame Place in Langhorne, Penn. Busch also owns the water parks Aquatica in Orlando, Adventure IslandÖ in Tampa and Water Country USA in Williamsburg.

InBev, the maker of Stella Artois, Beck's and Labatt Blue brands, is buying Anheuser-Busch for $52 billion, creating the world's largest brewer. The new company will be known as Anheuser-Busch InBev.

Anheuser-Busch makes Budweiser and Michelob, and used its entertainment parks as a marketing tool for its beers, showcasing teams of the famous Clydesdale horses and serving the company's beers in hospitality rooms.

For the next few months, uncertainty over SeaWorld's future owner seems the only certainty.

"The deal won't even close until the end of the year," Russo said. "There will be a lot of questions between now and then."

And Spiegel said that any sale of the entertainment parks is dwarfed by the creation of the world's largest brewer.

"This is such a huge, huge deal. Before they even get to the parks it could be a year," Spiegel said. "But people could start talking now."

He expected the sale of the parks could bring at least $3.5 billion or higher than $4 billion.

"It wouldn't be overpaying for those parks in that price range," Spiegel said.